DOCSLIB.ORG

F.A.O. Solicitors Regulation Authority the Cube 199 Wharfside Street Birmingham B1 1BN

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
F.A.O. Solicitors Regulation Authority the Cube 199 Wharfside Street Birmingham B1 1BN F.A.O. Solicitors Regulation Authority The Cube 199 Wharfside Street Birmingham B1 1BN 11 February 2015 Dear Sirs Response of the CLLS Professional Rules and Regulation Committee to the SRA’s consultation on the Separate Business Rule (the “Consultation”) The City of London Law Society (“CLLS”) represents approximately 15,000 City lawyers through individual and corporate membership including some of the largest international law firms in the world. These law firms advise a variety of clients from multinational companies and financial institutions to Government departments, often in relation to complex, multi-jurisdictional legal issues. The CLLS responds to a variety of consultations on issues of importance to its members through its specialist committees. This response to the Consultation has been prepared by the CLLS Professional Rules and Regulation Committee.1 We acknowledge the context in which the Consultation proposals have been promulgated. The unregulated legal services sector is already permitted and growing. Alternative Business Structures (‘ABS’)’s established by non-lawyers are being granted waivers of the Separate Business Rule, although we would submit that is principally a result of their key investors already undertaking business activities which happen to fall within the scope of prohibited separate business activities, as opposed to indicating market demand for change, and could have been foreseen. The Government has confirmed that it has no appetite to legislate to change the Legal Services Act 2007 (‘LSA’) or to review its list of reserved activities. We do not necessarily have appetite for an approach which mandates the SRA regulating all solicitors’ reserved and non-reserved activities. As we stated in our response to the SRA’s MDP Consultation, we consider the time is ripe for a systematic and risk based review of solicitors’ activities, holistically. Our informal discussions with the SRA in the context of this consultation lead us to conclude that the SRA agrees with us that there is no correlation between 1. reserved/non-reserved actions and 2. low/high risk. 1 A list of the members of the CLLS Professional Rules & Regulation Committee can be found here: http://www.citysolicitors.org.uk/index.php?option=com_content&view=category&id=151&Itemid=469 1 Furthermore, we appreciate the logic which informs the SRA’s approach in the Consultation. Against the backdrop of the expanding unregulated sector and ABS waivers, some other regulated professions, including chartered accountants, which can participate in ABSs, do not have separate business rules. If anyone can set up an unregulated legal services business, the restriction on authorised persons having links to them, begins to appear arcane. However, we consider the proposal to remove the Separate Business Rule and replace it with specified Outcomes is overly hasty, not based on sound data and has been made without a proper assessment of the likely impact, which we consider in the short term, if the proposal is implemented as drafted, may lead to a splintering and destabilisation of the profession and damage to the solicitor brand, at home and overseas. The Consultation proposal involves the SRA permitting authorised persons to hold limited and passive investments in unregulated legal service providers. The paradox is that solicitors, many of whom are likely to be the most qualified and experienced providers of non-reserved services (including legal advice) in the market, are (with barristers) the only group of persons who will be prohibited from practising in their own separate businesses. In this, the SRA’s response is logical but lacks follow through. If the goal is a level playing field, the proposal should promote change to the Practice Framework Rules and permit solicitors to own, and practise in, unregulated legal service businesses, with the risks of consumer confusion being managed by clear signposting. That is likely to be in consumers' best interests as their unregulated sector service provider options will then include qualified and experienced professionals, with a thorough grounding in the English legal tradition and system. Permitting solicitors to flow across the previously impermeable ‘wall’ into the unregulated sector should act to drive up standards there. If the Consultation response needs to be delayed to permit further consultation on relaxation of the Practice Framework Rules, we suggest that is a sensible measure, thus permitting avoidance of an awkward ‘half way house’ solution. At first glance, City and other large firms may be best placed to benefit from the Consultation’s proposal as they are likely to undertake the highest percentages of non-reserved activities2. From a risk based perspective, they arguably already have the infrastructure properly to manage their non-reserved activities, having sophisticated client bases and established risk management and governance systems. Some may avail themselves at an early stage of the opportunities offered by the new flexibility; others may be wary about hiving off work to unregulated separate businesses for a range of factors, including: concerns around how such work will be properly supervised and managed, if solicitors cannot themselves practise in the separate business; issues with the proposed new referral outcomes and proposals relating to use of brand, on which we comment further in our detailed response to your Question 2 below; unwillingness to cede the client’s legal professional privilege; uncertainty as to the operation of conflicts rules on the recognised body in relation to clients of the separate business; uncertainty as to the operation of the Proceeds of Crime Act and, in particular, whether or not communications between the recognised body and the separate business might in some circumstances constitute improper “tipping-off”; 2 See comments in the first bullet point on page 3 of this response. 2 reluctance on the part of long serving professionals to slough off their ‘solicitor’ titles and pick up roles in the unregulated sector as ‘lawyers’; and depending on how firms with international offices are structured, reluctance or inability (due to overseas bar rules) on the part of overseas or foreign-qualified members/partners in the recognised body, to participate in organisations which invest in or share fees with entities which offer unregulated legal services. In particular, overseas or foreign qualified members/partners might be prohibited under overseas bar rules from sharing privileged or confidential client communications with a separate business operating outside the legal profession. If (when?) competition from new entrants to the unregulated sector (who may be private equity backed and well-funded, governed and insured) or from other professionals, who are not subject to continuing restrictions on how they can participate in the unregulated legal services sector, starts to bite, reluctant acceptors may be driven to come to terms with the above reservations and/or artificially to restructure, for example by English and Welsh members of a Verein structure setting up a mirror structure, which does not include overseas partners, specifically to invest in a separate business. The key issue with the Consultation’s proposal is that solicitors, many of whom, particularly in the City, undertake only non-reserved activities via the provision of legal advice, will remain unable fully or actively to participate or practise in the unregulated sector. If (when?) clients start choosing players in that sector as the premier providers of non-reserved legal services, competition may drive solicitors out of the regulated sector and off the roll, to practise instead in the new world as ‘lawyers’ with the SRA (and the Law Society) experiencing a consequential (and potentially significant) decline in clout and revenue. The ultimate concomitant of the SRA deregulating to open up provision of legal advice by separate businesses, is that legal advice will, sooner or later, stop being a ‘solicitor service’. Solicitor services may shrink to becoming those services which only solicitors can provide, i.e. reserved activities. Whether that is good or bad is a moot point but we would submit that the SRA should not press ahead with these changes, without acknowledging the core role of legal advice in the services which many solicitors provide and the impact of making changes which permit solicitors only to invest, but not start providing that legal advice, in the unregulated sector. The Consultation Questions 1 Do you have any comments on our conclusions from the market analysis, and any additional information or data to supply to assist that analysis? Given the potential, far reaching implications for the solicitors’ market and brand of your proposals, the market analysis on which they are based, is surprisingly unscientific and not bespoke (i.e. not prepared specifically for the Consultation). You may recall that we made similar comments in our response to the MDP consultation in which we called for a systematic risk analysis of the reserved and non-reserved sectors, which recommendation appears to have been overlooked. In our view, this is a missed opportunity and more time for research and consultation should have been allocated, prior to the SRA recommending changes in this complex area. Annex 1 to the Consultation represents a series of findings, pulled together from various sources, which: 3 crucially fails to flag the conclusion of the (public domain) report of Charles
Load more

Recommended publications
  • Your Guide to Choosing a Solicitor 2018/19
    your guide to choosing a solicitor 2018/19 www.spinal.co.uk DM_ad_130mm x190mm_HR 18/07/2018 08:59 Page 1 ACCESSIBLE DESIGN By And For Disabled People Award-winning designer ADAM THOMAS, a wheelchair- user since 1981 has over 30 years’ experience of access issues. He is a leading authority on accessible kitchen design and has been involved in projects for the SIA HQ in Milton Keynes, Stoke Mandeville hospital, the Injured Jockey’s Fund and the Olympic Village London 2012. Through his work he has helped hundreds of clients regain their independence, including those affected by catastrophic injury and ABI. DESIGN MATTERS offers a comprehensive end-to-end service from design to installation with outstanding customer support. Each kitchen is tailored to the client’s requirements and provides a fully accessible, safe space that is entirely fit-for-purpose. Some of our clients even report reduced reliance on PAs. APPROVED Tel: 01628 531584 MEMBER www.dmkbb.co.uk 801128 SIA Healthcare A4 Advert_Layout 1 01/02/2018 14:20 Page 1 801128 SIAYOUr Healthcare A4 Advert_Layout 1 01/02/2018 dedicated 14:20 Page 1 home delivery service SIASIA Healthcare's Healthcare's 2,000th 2,000th Member Member GavinGavin Walker Walker OverOver 2,6 2,006 00SIA SIA membersmembers have have chosenchosen it. 9it.2% 9 2of% of SIA Healthcare SIA Healthcare members would members would recommend it* recommend it* SIA Healthcare is a dedicated Home Delivery Service that provides spinal cord injured people with SIA Healthcareall of their urology is a dedicated and stoma Home products Delivery and prescription Service that providesmedication spinal efficiently cord injuredand discreetly people to with all oftheir their door.
    [Show full text]
  • Law Society Complaints Procedure Uk
    Law Society Complaints Procedure Uk Die-hard Norris controlling all. Mikhail cry menacingly. Disliked Neel beshrews giocoso. Bonuses have otherwise been accounted for. Scotlandwho should make responsible for complaints handling. Directing the complaint for our attorneys. Scottish legal advice, apologise or law. We are law society complaints procedure details provided and the complaint arising from the use. Our Complaints Policy Cognitive Law. Income to and Corporation Tax payment also frequently relevant. What regulating body that complaint in law society or the procedures in the information in all your membership, which is acting for complaint is needed for? If this procedure of complaint please contact law society or advising or chief managing partner responsible for loss of completing his views on. All firms of solicitors in England and Wales will missing a complaints procedure. If you know and complaints committee in law society to providing it should be bound to. The law society about our central register and completions take longer practising in terms of the ssdt is found. If, for heart reason, Mr Gibbins is unavailable, please contact Dr Laura Brampton instead. Terms and conditions Hughes Solicitors. They will then the law charge you any solutions agreed method, then you are only if you become final responsibility for you of an independent? It just fail to illustrate how speaking the times most lawyers are now it comes to refer service and pick some believe them are talking to workshop a nasty attack when competitors who grieve this seriously enter the market. If you are law society complaints procedure before continuing instructions on the complaint? The reality is, consistent most cases, very different.
    [Show full text]
  • Solicitors Regulation Authority the Cube 199 Wharfside Street Birmingham B1 1RN
    Solicitors Regulation Authority The Cube 199 Wharfside Street Birmingham B1 1RN FAO Juliet Oliver Crispin Passmore 20 th December 2017 Dear Sirs, Response of the CLLS Professional Rules and Regulation Committee (“CLLS”) to the SRA Consultation “Looking to the future: better information, more choice” (September 2017). 1. Introduction 1.1 The CLLS has read the SRA consultation paper entitled “Looking to the future: better information, more choice”. 1.2 In January 2016, the CLLS submitted a response to the October 2016 SRA discussion paper entitled “Regulatory data and consumer choice in the legal services” (the “January response”). 1.3 For the most part our comments reiterate those set out in our January response. In summary, the CLLS supports the recommendations set out in the Competition and Markets Authority (CMA) report on the legal services for the provision of better information to sectors of the market where competition is not functioning and to assist individual consumers and small businesses in being able to make better informed choices when selecting solicitors. However, any proposals to publish information either by firms or by the SRA must: (A) be proportionate; (B) not be unduly burdensome to firms; and (C) ensure that the information to be published is objective, properly contextualised and presented in a helpful, clear and understandable manner which is not misleading. 1.4 We have provided our response to some (but not all) of the questions raised in the consultation paper. We have grouped our comments under the headings of Price transparency and description of the services provided, Publication of PII data, How to complain to the firm and to the Legal Ombudsman, Creating a digital register, Publishing complaints data and Transparency requirements of individual solicitors working outside LSA regulated firms.
    [Show full text]
  • Scheme Rules
    Consultation response: April 2010 Scheme rules Scheme rules consultation response Introduction The Legal Ombudsman is being established by the Office for Legal Complaints (Legal Ombudsman) under the Legal Services Act 2007 to make sure users of legal services can go to an independent and impartial Ombudsman scheme to resolve disputes involving their lawyer. Finalising the scheme rules is a vital step in making the aims of the Act real so that users of legal services and their lawyers will have confidence in how complaints are resolved. The scheme rules themselves provide the framework for how we will resolve disputes and, drawing on the learning from complaints, inform good practice. The rules will underpin our decisions and our process. Over the last months of 2009 we consulted on the scheme rules. Of the three consultations we ran last year the scheme rules attracted the most responses (twenty) from a balanced mix of consumer and campaigning groups, individual firms and organisations representing the profession. Thank you to everyone who shared their views with us. We were pleased that the overall feedback was that the rules provide a robust structure to support an Ombudsman scheme that resolves disputes impartially, quickly and fairly. The responses to our consultations are published on the Legal Ombudsman website at www.legalombudsman.org.uk. Following the consultation our Board considered the responses we received and then agreed the scheme rules for the Legal Ombudsman. The Legal Services Board (LSB) then approved the proposed scheme rules as they are required to do under section 155 of the Act. We then wrote to the Lord Chancellor to ask for his consent (also under section 155 of the Act) to the case fee structure which is included in chapter six of the scheme rules.
    [Show full text]
  • Better Information in the Legal Services Market
    June 2018 Economic Insight Ltd BETTER INFORMATION IN THE LEGAL SERVICES MARKET A report for the Solicitors Regulation Authority and the Legal Ombudsman Better information in the legal services market | June 2018 ECONOMIC INSIGHT CONTENTS 1. Executive summary 3 The background to our research and its objectives 3 Overview of our research 4 Findings and conclusions 7 Recommendations 12 Structure of this report 13 2. Background to and overview of research 14 Background to our research 15 Overview of our research 19 Common methodological considerations 20 3. Literature review 24 Evidence from legal services 25 Evidence from other sectors and overseas 35 Conclusions and implications 49 4. Online survey of recent users of legal services 51 Methodology 52 1 Better information in the legal services market | June 2018 ECONOMIC INSIGHT Results relating to choices made 53 Results relating to awareness and understanding of different regulatory protections 59 Conclusions 78 5. Online complaints choice exercise 79 Methodology 80 Results relating to level 1 analysis 84 Results relating to level 2 analysis 91 Conclusions 98 6. Online badges trial 100 Methodology 101 Results relating to choices made 105 Results relating to awareness and understanding of regulation 109 Results relating to reflections on choices made 113 Conclusions 116 7. Online regulatory protections trial 117 Methodology 118 Results relating to rankings 127 Results relating to awareness and understanding of different regulatory protections 132 Results relating to reflections on rankings made 138 Conclusions 141 8. Recommendations 143 Overarching recommendations 143 Recommendations relating to the provision of complaints information 144 Recommendations relating to the provision of information about regulatory protections 145 2 Better information in the legal services market | June 2018 ECONOMIC INSIGHT 1.
    [Show full text]
  • Complaints in Focus: ‘No Win, No Fee’ Agreements
    Complaints in focus: ‘No win, no fee’ agreements www.legalombudsman.org.uk DISPUTES ABOUT CONDITIONAL FEE AGREEMENTS AND THEIR CAUSES 1 Summary Over recent months, the Legal Ombudsman has become increasingly concerned about the operation of ‘no win, no fee’ legal services. We have made conduct referrals to regulators about the way some law firms have handled these agreements. Our scheme has also made financial remedies to consumers of almost £1 million in the past year.1 ‘No win, no fee’ agreements promise customers a way of funding litigation at minimal financial risk to themselves. They are usually formally referred to as conditional fee agreements (CFAs), and are sold on the understanding that a lawyer will not take a fee if the claim fails. In most cases, if the claim is successful, the lawyer will charge an uplift (known as a success fee) in addition to their base costs. These agreements can offer customers an affordable and simple solution. Not all the time though - we are seeing examples of very poor service in some of the cases that come to us and have made conduct referrals where service providers have failed to honour agreements with customers or have exploited loopholes in the contracts, with serious consequences for their clients. These raise questions about the way that such agreements are structured and sold. There are signs that these cases may be representative of a wider problem with ‘no win, no fee’ agreements which, if unaddressed, may lead to significant market issues arising. Some, such as the Committees of Advertising Practice (CAP), have previously warned that the phrase ‘no win, no fee’ is “potentially misleading, because it can imply that the client will be liable for no costs whatsoever”2.
    [Show full text]
  • Complaints Procedure
    Draft: Complaints Procedure 1. Chambers procedures for dealing with complaints have been reviewed to ensure they cover the types of problems that arise, reflect current standards, and are effective. Sections 7.4 and 7.5 in the Chambers manual sets-out Chambers’ current complaints procedure as drafted in 2008 from a Bar Council template. The procedure in the manual seems to be dealing more with complaints from members of the public, whereas there are other types of complaint that arise (see below). The procedure is also slightly confused in terms of responsibilities and needs to be upgraded to conform with the present management structure of Chambers. It is also the case that some complaints against professional conduct require referral to the regulatory authorities – Bar Standards Board or Bar Complaints Commissioner. 2. The BSB now requires those dealing with complaints to receive training to ensure members of Chambers and staff have guidance in appropriate procedures and the fairness required in the handling of complaints. It is now no longer good enough to appoint an ad hoc panel. Chambers also needs an appeal mechanism so that decisions are reviewed if a party is unhappy with an outcome. 3. The headings for the different type of complaint are: i. Members over the conduct of another member of Chambers. ii. Disputes over fees between members of Chambers. iii. Members of Chambers as to staff conduct or service. iv. Members of the public complaining over the conduct or quality of service received from a member of staff, member of chambers or a pupil. v. Judges, courts, solicitors, prosecuting authorities complaining as to conduct or quality of service of a member of staff or member of Chambers.
    [Show full text]
  • Dear Colleague, Your Weekly Law Society Update As the Professional
    Dear colleague, Your weekly Law Society update As the professional body for solicitors, every week the Law Society is working hard to influence the legal and regulatory environment on behalf of our profession and to promote solicitors at home and abroad. We support practice excellence, are an informed source of legal sector news and support members at every stage of their career. Here are some highlights from our work last week. Influencing on behalf of the profession and promoting the profession The Law Society’s media profile this week: The Law Society’s ‘no-deal’ Brexit papers giving advice on potential rule changes affecting business disputes, data and family law were covered in the Gazette, New Law Journal, Family Law Week & Australasian Lawyer. Wills and equity committee chair Ian Bond was on BBC Moneybox talking about the government’s decision to introduce banded probate fees, despite intense opposition the last time they tried. You can listen here. The story begins at 10:34. There were also reports in the Times (£) plus more coverage of probate fee hikes in the Guardian. Victims forced to sign gagging clauses could be given a voice as Parliament launches a new inquiry into the use of non-disclosure agreements following the scandal surrounding Sir Philip Green. Max Winthrop, chair of the Law Society’s Employment Law Committee, said: “The evidence that you give to a select committee is covered by Parliamentary privilege in the same way that the floor of the House of Commons is covered.” Report in the Telegraph (£). More coverage of the inquiry in the Gazette.
    [Show full text]
  • Legal Ombudsman
    Legal Ombudsman Here to help The Legal Ombudsman can help you resolve your complaint about legal services What we do The Legal Ombudsman resolves complaints about legal services. It may be that your lawyer has failed to do what they agreed, has been slow in responding, or increased their charges without explaining why. Perhaps you think you’ve been unreasonably refused a legal service or have been pressured to accept a service you didn’t want. We will investigate your complaint and look at all the facts to reach a fair outcome. We are independent, impartial and we don’t take sides. If we decide the service you received was unreasonable, we can make sure your lawyer or law firm puts it right. Our service is free to consumers. What issues can we help resolve? We can investigate lots of different types of legal service complaints, such as the way a lawyer has dealt with a will or family issue, if you’ve had poor service when you bought or sold a house or made a personal injury claim. We can look into complaints about all sorts of lawyers: solicitors, barristers, licensed conveyancers, cost lawyers, legal executives, notaries, patent attorneys, trade mark attorneys, law firms and companies providing legal services. To find out if we can help, please get in touch using the contact details on the back of this leaflet. Who can use our service? All members of the public and very small businesses, charities, clubs and trusts. We prefer you to come to us directly, but you can ask a friend, relative or anyone else to get in touch for you.
    [Show full text]
  • First-Tier Complaints Handling: LSB Requirements for Approved Regulators
    First-tier complaints handling: LSB requirements for approved regulators A consultation issued by the Legal Services Board inviting representations on proposed updates to its requirements, outcomes and guidance Representations are invited to be made by 17:00 on Wednesday, 27 April 2016. 1 Contents Introduction ............................................................................................................. 3 The current requirements, outcomes and guidance ................................................ 4 Reviewing the 2010 publication .............................................................................. 6 Proposed changes .................................................................................................. 7 Representations ...................................................................................................... 9 Next steps ............................................................................................................... 9 How to respond ....................................................................................................... 9 Annex A: Proposed revisions to requirements and outcomes ............................... 10 Annex B: Proposed revisions to guidance ............................................................ 11 2 Introduction 1. In May 2010, the Legal Services Board (LSB) published requirements for approved regulators: First-tier complaints handling1 (the publication). In particular, this sets out that Approved Regulators (ARs) must require all individuals
    [Show full text]
  • Meeting OLC Board Agenda Item No. Paper No. 13
    Meeting Agenda Item No. 13 OLC Board Paper No. 91.11 Date of meeting 17 October 2018 Time required 15 Minutes Title Horizon Scanning – October 2018 Sponsor Rob Powell – Chief Executive Officer Status OFFICIAL To be Members and those in attendance communicated to: Executive summary Since the beginning of financial year 2018/19, the External Affairs team has been producing a horizon scan to inform senior members of the organisation of developments in legal regulation, claims management, the ombudsman landscape and beyond. Not only does this build knowledge and understanding of the external environment, but it assists with forecasting and allows us to consider policy responses well in advance of any changes in the landscape. There have been further changes made to the format of this paper to assist with communication of analysis and impact. October’s horizon scan highlights in particular major changes to regulators’ rules, including flexibility in where service providers can practice, what information they must provide to the public about their services, and how they are trained before they become qualified. It also notes recent research into opinions and concerns of the profession regarding these changes. Recommendation/action required Board is asked to NOTE the update and analysis provided. 1 Horizon Scan – October 2018 Overview Likelihood score refers to how probable it is that this impact will hit us (at the level identified). Demand is effect on complaint volumes. Impact categories High – this issue has the potential to alter our day-to-day operations within the next year and may require a direct response. Medium – this issue could necessitate policy development on an issue; it may affect the environment in which we operate and/or is likely to affect us directly within the next three years.
    [Show full text]
  • OLC Annual Report and Accounts 2019 20
    The Office for Legal Complaints Annual report and accounts For the year ending 31 March 2020 Presented to Parliament pursuant to Section 118 of the Legal Services Act 2007. Ordered by the House of Commons to be printed on 14 July 2020 HC 568 © Crown copyright 2020 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at www.gov.uk/official-documents. Any enquiries regarding this publication should be sent to us at [email protected] or Legal Ombudsman, PO Box 6806, Wolverhampton, WV1 9WJ ISBN 978-1-5286-2019-2 CCS0320378892 Printed on paper containing 75% recycled fibre content minimum Printed in the UK by the APS Group on behalf of the Controller of Her Majesty’s Stationery Office Contents Performance overview ................................................................... 1 PURPOSE OF THE PERFORMANCE OVERVIEW ................................................................................... 1 FOREWORDS BY CHAIR OF THE OFFICE FOR LEGAL COMPLAINTS ................................................ 1 HOW THE OLC HAS DISCHARGED ITS FUNCTIONS ............................................................................. 3 PERFORMANCE SUMMARY: CHIEF OMBUDSMAN’S AND CHIEF EXECUTIVE’S REPORT ............... 5 Performance
    [Show full text]